Heartflow, Inc. (HTFL)

Price$48.91Cached quoteAs of 2026-09-06 00:57 UTC

AI: Overvalued

Price checkThe stock looks expensive after its big jump, trading far above what current sales and profits support.

The shares have jumped more than fifty percent after last week's earnings beat, valuing the company near $4 billion — roughly nineteen times its $212 million of revenue over the past year, or about sixteen times management's raised 2026 forecast of $246–250 million. Still unprofitable — about $118 million lost over the past year — the company offers no earnings yardstick, so the price rests on growth alone. It trades above the average Wall Street target of $43.50. Today's price requires years of forty-percent growth, wider margins, and no legal or payment shocks — a thin margin of safety, supporting an overvalued verdict.

Big pictureRevenue is growing about forty percent a year as hospitals shift heart testing toward AI-analyzed CT scans.

HeartFlow sells hospitals software that turns heart CT scans into maps of blocked arteries and built-up plaque, charging per case through Medicare and private insurers. Revenue grew from $87 million in 2023 to $126 million in 2024 and $176 million in 2025, and last quarter rose 48% to $64 million. Demand follows hospital budgets and government payment policy rather than the economic cycle, so the cycle to watch is regulatory. Management says CT-based testing has displaced only about 11% of older stress tests, and its newer plaque product applies to roughly sixty percent of scans versus a third for the original test — a long runway.

Business strengthHigh gross margins, a debt-free balance sheet with ample cash, and rapidly shrinking losses signal durability.

Gross margin hit 83.3% last quarter, up from 75.6% a year earlier, as AI automation replaces manual scan processing. The adjusted quarterly loss narrowed to about $6 million from $18 million, and operating cash burn improved to $8.6 million from $27 million. The balance sheet holds roughly $247 million in cash and investments with no debt — several years of funding even if losses persist — and management aims to cover costs from operations by mid-2028. One caveat: employee share grants add roughly three percent to the share count annually, modest dilution that shifts a small amount of value away from existing owners.

What could change the storyAn open federal inquiry into sales practices, Medicare payment decisions, and plaque adoption pace could reshape the story.

The biggest wildcard is the Justice Department's civil investigation, opened last autumn, into hospital financial relationships and sales-and-marketing conduct under anti-kickback and false-claims laws; essentially all revenue flows through such relationships, with unquantified penalty risk. Second, Medicare's draft 2027 payment rules hold current rates broadly steady, but a redesigned payment system for AI software arrives later this decade and final rules could disappoint. Third, execution: management targets roughly 1,250 hospitals using its plaque tool by year-end after raising forecasts twice. Stalling activations would undercut the growth assumptions in today's price; resolving the inquiry would lift the largest cloud.

AI: News

Blowout Quarter, Raised OutlookSecond-quarter results crushed forecasts, and management lifted its full-year sales outlook, sending shares sharply higher.

About a week ago the company reported quarterly revenue of $64.1 million, up 48% year over year and roughly $8 million above forecasts, with an adjusted loss of seven cents per share versus thirteen cents expected. Full-year revenue guidance moved up to $246–250 million from $228–232 million. The stock surged roughly thirty percent across the following sessions, and at least five brokerages lifted price targets to about $45. The report matters because it confirmed the newer plaque-analysis product as a second growth engine alongside the original blood-flow test.

Medicare Payment Proposals LandNew Medicare payment proposals unsettled the stock earlier this summer; management says current rates remain stable.

Earlier this summer, federal health officials released draft 2027 payment rules covering hospital outpatient and physician services, including an initial framework for paying for AI-enabled medical software. HeartFlow shares fell sharply on several days around then; attributing those drops solely to the proposals is uncertain. On last week's earnings call, management said payment rates for both products are stable, hospital CT scan payment rose about twelve percent, and the longer-term AI framework looks constructive but likely not effective until late this decade. Final rules land later this year.

Justice Department Inquiry ContinuesA federal civil investigation into sales practices remains open, creating an unquantified legal and commercial risk.

Court disclosures show HeartFlow and certain employees received civil investigative demands — formal Justice Department document requests — last autumn, tied to anti-kickback and false-claims laws and centered on financial relationships with medical providers and marketing conduct. Management gave no update on last week's call, describing a multi-year process and full cooperation. Stakes are high because virtually all revenue flows through hospital billing built on those physician relationships; an unfavorable outcome could bring penalties or forced changes to selling practices, while clearance would remove the stock's biggest unresolved legal question.

Patent Suit Against CleerlyHeartFlow sued its closest rival for patent infringement, aiming to protect its technology lead.

This spring, HeartFlow sued Cleerly, its closest competitor in AI coronary plaque software, in federal court in Texas, alleging patent infringement and seeking damages plus a permanent ban on infringing products. On last week's call, management expressed confidence in its claims while acknowledging such cases typically run for years. The suit cuts both ways for investors: a win would entrench HeartFlow's lead in the plaque market now driving growth, but prolonged proceedings add expense and leave competitive questions hanging over the very product carrying current expectations.

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Revenue

2023

2024

2025

Net income

2023

2024

2025

Free cash flow

2023

2024

2025

Total cash / debt

CashTotal debt

2023

2024

2025

Financial statements

	2025	2024	2023
Revenue	$176.0M	$125.8M	$87.2M
Gross profit	$135.2M	$94.4M	$58.1M
Gross margin	76.80%	75.07%	66.59%
Research & development	$64.9M	$43.5M	$35.9M
Operating expenses	$199.3M	$155.7M	$131.0M
Operating income	−$64.1M	−$61.2M	−$72.9M
Operating margin	−36.39%	−48.66%	−83.64%
EBITDA	−$58.6M	−$55.9M	−$68.2M
EBITDA margin	−33.30%	−44.40%	−78.20%
Net income	−$116.8M	−$96.4M	−$95.7M
Net profit margin	−66.35%	−76.65%	−109.73%
Basic EPSper basic share	-$3.17	-$17.98	-$25.32
Diluted EPSper diluted share	-$3.17	-$17.98	-$25.32

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

9.74%of listed shares

Bain Capital Life Sciences Investors, LLC8.45M shares · Jun 30, 2026

View holders

Top 20 reported holders of HTFL
Holder	% owned
Bain Capital Life Sciences Investors, LLC	9.74%8.45M shares
WELLINGTON MANAGEMENT GROUP LLP	9.07%7.86M shares
BlackRock, Inc.	5.99%5.2M shares
FMR LLC	5.56%4.82M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.13%3.58M shares
BAMCO INC /NY/	3.72%3.23M shares
Tansey Casey M	≈3.68%3.19M shares
VANGUARD CAPITAL MANAGEMENT LLC	3.17%2.75M shares
Jupiter Topco LLC	2.79%2.42M shares
Lightcap Jeffrey C	≈2.68%2.33M shares
Invesco Ltd.	2.65%2.3M shares
ALLIANCEBERNSTEIN L.P.	2.22%1.92M shares
Point72 Asset Management, L.P.	1.98%1.72M shares
SUMMIT PARTNERS PUBLIC ASSET MANAGEMENT, LLC	1.95%1.69M shares
STATE STREET CORP	1.69%1.47M shares
UBS AM, a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC	1.69%1.47M shares
GEODE CAPITAL MANAGEMENT, LLC	1.57%1.36M shares
Nuveen, LLC	1.56%1.35M shares
MORGAN STANLEY	1.22%1.05M shares
UBS Group AG	1.12%975.51K shares

Percentages use 86.72M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$1.05M disclosed value

Sells (SEC code S)18$124.97M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 24, 2026Form 4 · 10b5-1	Farquhar John C.M.Chief Executive Officer	SellCommon Stock	38.9K	$35.00	$1.36M	457.9K
Jun 10, 2026Form 4 · 10b5-1	Farquhar John C.M.Chief Executive Officer	SellCommon Stock	22.6K	$28.50	$643.0K	496.8K
May 18, 2026Form 4 · 10b5-1	Rogers CampbellChief Medical Officer	SellCommon Stock	9.2K	$28.34	$261.3K	78.7K
May 11, 2026Form 4 · 10b5-1	Farquhar John C.M.Chief Executive Officer	SellCommon Stock	22.6K	$29.12	$657.0K	519.4K
Apr 30, 2026Form 4	Bain Capital Life Sciences III General Partner, LLC +4TenPercentOwner	SellCommon Stock · indirect	56.2K	$30.05	$1.69M	8.45M

Review ownership filings at SEC.gov ↗

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